In the United States, credit and debit cards rely on magnetic stripe technology. The magnetic stripe is the black, brown, gold, or silver band on the back of your credit or debit card.
Tiny, iron-based magnetic particles in this band store your account number. When the card is swiped through a “reader,” the data stored on the magnetic stripe is accessed. Card readers and magnetic stripe technology are inexpensive, readily available and vulnerable to fraud.
The other, more secure type of credit card is called “EMV,” which stands for Europay, MasterCard, and Visa. According to the Smartcard Alliance, “EMV is an open-standard set of specifications for smart card payments and acceptance devices.
EMV chip cards contain embedded microprocessors that provide strong transaction security features and other application capabilities not possible with traditional magnetic stripe cards.”
If you have plans to travel internationally this summer, you may have problems using your U.S. magnetic stripe card abroad, as many other countries, particularly in Europe, have made the EMV card the new standard.
The Smartcard Alliance explains:
“U.S. travelers are reporting troubles using their magnetic stripe cards while traveling. Aite Group has estimated that 9.7 million U.S. cardholders experienced magnetic stripe card acceptance issues when they traveled internationally in 2008, costing banks $447 million in lost revenue. The most common areas where travelers may face issues are at unmanned kiosks for tickets, gasoline, tolls and/or parking, and in rural areas where shop owners do not know how to accept magnetic stripe cards.”
To avoid payment problems, follow these steps:
- Ask your bank if they offer an EMV card. Most major banks do, including Bank of America, Chase, Citibank, U.S. Bank, and Wells Fargo
- Pay in cash
- Don’t expect your debit cards to work at payment terminals. Yes, your debit card requires a PIN, but that doesn’t make it an EMV card. You should be able to use your debit card to get cash from ATMs
- Inform your bank you will be traveling, otherwise they may flag your card for fraud
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